CR Cement to acquire cement plant

CR Cement to acquire cement plant
Published: 10 September 2004

China Resources Cement Holdings, one of the largest suppliers in south China, will soon acquire a project from its parent company as part of its $1 billion capital expenditure to seek growth, according to vice-chairman and general manager Shi Shanbo.  In addition to acquiring existing production facilities, the red chip would build its own factories to raise capacity and take advantage of demand growth in the Pearl River Delta, Mr Shi said yesterday.

He said the company would definitely exercise an option to acquire a 73.5 per cent stake in a new cement factory in Ping Nan, Guangxi province, from its unlisted parent, China Resources (Holdings), by the end of the year.  On exercising the option, CR Cement will pay a premium on the $160m construction costs set at 50 basis points above the Hong Kong interbank offered rate.  The Ping Nan factory, expected to begin operations at the end of this year, will lift the company’s annual cement production capacity by 60 per cent, or 2Mt, to 5.3Mt. The company was also in talks to acquire concrete-producing facilities that would raise its annual production capacity by about 33 per cent to 4.5 million cubic metres by the end of the year, Mr Shi said.